The focus of this blog is on the wonders of government-run health-care everywhere but I also note the damage done to private medicine by a legal system that supports predatory litigation.

The long-established socialized medicine systems in Britain and Australia are a particularly relevant warning about where such systems end up.

Posts by John J. Ray (M.A.; Ph.D.)

Sunday, October 31, 2004

Tenncare failing

"A federal judge ruled that the state has tried but failed to provide required medical screening tests for a half-million children covered by TennCare and must adopt changes quickly. U.S. District Judge John Nixon has ordered the state to follow a court-developed plan to meet federal law and terms of a previous deal regarding the tests, known as Early and Periodic Screening, Diagnosis and Treatment. ... 'If this plan becomes effective, it will be a critical blow to our efforts to reform TennCare,' he said. 'The court's proposal would significantly increase cost, impose delays and inject the court deeply into the day-to-day operation of TennCare.'"

Here are the facts behind this public health crisis. In the 1960s and 1970s the United States had 26 vaccine manufacturers. Now we are down to just four. There is now only one vaccine manufacturer for each of the aforementioned diseases. The explanation is politicians and trial lawyers. Drug companies can't make profits from producing vaccines any longer because of the issue of product liability lawsuits.

In 2002 the entire global vaccine manufacturing industry had roughly $6 billion in sales. But in that same year trial lawyers sought $30 billion in damages against the industry in just one lawsuit. The damages sought by the lawyers were five times larger than the entire industry's net income. And there are now over 350 similar lawsuits pending. So the trial bar has destroyed a critical medical industry.

Congress has the power to fix this crisis. Why haven't they? The answer lies with the massive political clout of the trial lawyers. Last year President Bush and Congress tried to shield American manufacturers from frivolous lawsuits and cap damages, but the legislation was squashed by the trial lawyers. The trial lawyers are the number one special interest contributor to the Democratic Party and to many Republican candidates, too. This year lawyers have donated some $100 million to federal candidates.

Senators John Kerry and John Edwards have both tried to pin the blame for the vaccine shortage on George Bush's lapel. Recently, Kerry charged: "How can we trust George Bush to protect us from bio-terrorist attacks when he can't even get us a flu vaccine?" But wait a minute. Senators Kerry and Edwards sided with the trial lawyers and opposed the very legislation that could have averted the influenza vaccine shortage. And guess who two of the largest recipients of trial lawyer largesse in the entire Congress are? This year Kerry has received $21.7 million from lawyers and Edwards received $11.5 million. These Senators and more than 200 others in Congress voted with deep-pocketed lawyers over the health needs of children and the elderly, who need the flu vaccine most.

Members of Congress will return to Washington a few weeks after the election for a "lame duck" session to complete unfinished legislative business this year. We'd say--and we would venture to guess that most Americans would heartily agree with us--that the most important "unfinished business" is to protect our public health and our access to life saving vaccines. The first action should be to vote on a Vaccine Liability Protection Act to ensure that the current shortage of a vital vaccine never happens again.

And a good comment from FEE: "We now know that when the government tries to suppress the production of a drug, say, heroin, supplies nevertheless remain plentiful. Yet when the government tries to guarantee production of a drug, say, flu vaccine, supplies can run short, endangering the people most vulnerable to disease. That's government for you."

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Saturday, October 30, 2004

Why should Californians care if they throw more people out of work or force prices up? They all think it is the other guy that will suffer and they will get a freebie.

California restaurants, retailers and labor unions are throwing millions of dollars into the campaign for and against Proposition 72, which would require large companies to provide health insurance. Each side sees the measure as critical to its future. Proposition 72 asks voters to give their blessing to a California law that will require a "pay or play" system of health care for most medium and large businesses. "We cannot afford to not fight 72," said Jot Condie, president of the California Restaurant Association. "We estimate that over 20 percent of our membership goes out of business the first day this takes effect." The association is the single largest contributor to the "no" side, putting $2.5 million into the effort earlier this month.

That contribution was countered by the Service Employees International Union, which put $2.75 million into the "yes" side last week. By the end of the campaign, both sides may top more than $10 million, in part to try to get their message out amidst the clutter of the presidential campaign and 15 other ballot measures.

The health care bill was passed last year on a party-line vote of the Legislature and signed by Gov. Gray Davis days before he was recalled. Businesses were so upset about the new law that they spent millions to put it on the ballot, and now voters will have the final say on Proposition 72. Under the law, employers with more than 200 employees must provide health care coverage for the workers and their families by Jan. 1, 2006. Companies with 50 to 199 employees would be required to offer coverage to their employees a year later. Proposition 72 requires all employers to offer coverage to their employees or pay a fee into a state health fund purchasing pool. Employers with 20 to 50 workers are exempt from the law until 2007, when it would kick in only if a new tax credit is created to help offset their costs. Businesses with fewer than 20 employees will not be affected by the law.

Gov. Arnold Schwarzenegger is opposed to the measure and campaigned against it Wednesday at a Chili's Grill and Bar in Los Angeles, saying it would creates a state-run health care program that he predicted would be "a big mess.'' ...

In even worse shape than restaurants are industries such as agriculture, which compete in a global marketplace, said Allan Zaremberg, president of the California Chamber of Commerce. "This puts the state at a horrible competitive disadvantage with every other state in the continental United States," he said. Hawaii is the only other state to require businesses to provide health insurance.

Cancer care across England is poorly coordinated, funding varies widely from one area to another and doctors are not referring patients for treatment quickly enough, a parliamentary report said Wednesday. The government has put Primary Care Trusts in charge of spending most of England's cancer budget but many of the local health bodies lack the experience and expertise to allocate those funds, the All Party Parliamentary Group on Cancer said. "The inquiry has exposed a serious problem. The government rightly says that cancer care is a national priority yet the system that's expected to deliver it is too fragmented," said the group's chair, Ian Gibson.

The report recommended that the budget for cancer treatment and prevention should go directly to cancer networks -- the groups of hospitals through which care is organized -- so they can make long-term plans on how best to fight the disease. It also said family doctors should have special training to recognize cancer symptoms sooner.

Charity CancerBACUP, which co-authored the report, says one in three people develop cancer during their lifetime and the government has pledged to improve cancer prevention.

Health Secretary John Reid said the government did want better training for doctors but he was not convinced the current system of funding from local boards was inadequate. "The proof of the pudding is in the eating in this because we have now got almost 1,200 more consultants, we have got hundreds, thousands of pieces of modern equipment," he told the BBC, adding Cancer deaths had fallen by 12.2 percent since 1997.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Friday, October 29, 2004

THE HUGE COSTS OF THE MEDICAL BUREAUCRACY

Even if partisans disagree about what government should do to expand health coverage, we should at least be able to agree that government should stop doing things that make health care unnecessarily expensive. One prime example is the many outmoded and questionable federal regulations that riddle our health care system. On Oct. 4, the Cato Institute released a study by Duke University professor Chris Conover that demonstrates that the costs of health care regulation outweigh the benefits by 2-1.

After studying 47 different types of health care regulations, Conover estimates those regulations cost Americans $169.1 billion on net in 2002 alone. The total costs are actually $339.1 billion, but the regulations provide about $170.1 billion in benefits. For the typical American, this translates into a hidden tax of more than $1,500 per household per year. And because that cost is built into medical prices, it makes health coverage unaffordable for about 7.5 million people.

So how do the candidates address this issue? Bush has made a gesture toward deregulation, but neither has a serious plan for reducing this enormous barrier to medical care. Conover estimates the single greatest regulatory cost is the medical liability system, which imposes a net cost of $80.6 billion annually. (That's after subtracting the benefits of compensating injured patients and preventing medical errors.) A reasonable way to curb those unnecessary costs would be to let patients and doctors negotiate a mutually acceptable level of negligence protection prior to treatment.

Instead of adopting that sensible reform, Bush would have Congress impose damage caps and other substantive rules of tort law on the states, despite its having no constitutional authority to do so. It is doubtful that Kerry or his running mate -- former personal injury lawyer Sen. John Edwards -- would support anything that allows patients to reveal how much they value the services of the trial bar.

The next greatest regulatory cost, according to Conover, is imposed by the Food and Drug Administration, which regulates medicines and medical devices. The FDA has long been criticized for delays in approving new medicines and for preventing patients from trying new therapies. Conover estimates those delays impose a net annual cost of $41.8 billion. A sensible way to cut down on unnecessary delays would be to let independent private agencies certify the effectiveness of new medicines, just as they now certify effectiveness for new uses of existing medicines. Yet neither Bush nor Kerry has issued a proposal that would reduce the lives lost to the FDA's delays or reduce the costs the FDA builds into the prices of prescription drugs.

To his credit, Bush has proposed allowing consumers to avoid expensive health insurance regulations by purchasing coverage from out-of-state insurers. In essence, this means your average Minnesotan would not have to purchase coverage for hairpieces (yes, hairpieces) or the 59 other types of coverage required by Minnesota law. Instead, he could purchase coverage from whatever state imposes regulatory costs that are more to his liking. If applied to all types of health insurance regulation, Bush's proposal could go a long way toward eliminating the net cost of such health insurance regulation ($14.4 billion).

There's more than just affordable coverage on the line here. Conover notes the more money people have, the better able they are to purchase greater health and safety. He estimates that by depriving Americans of $169 billion annually, health care regulations lead to 22,205 unnecessary deaths each year. The Institutes of Medicine estimate 18,000 Americans die each year from a lack of health insurance, making over-regulation a bigger problem than the uninsured. It would be nice if our politicians saw it that way.

I suppose some people will criticize this but it sounds like a breaking down of bureaucratic barriers to me. I cannot conceive of ANYTHING that would take more than seven years of training

The amount of time that it takes for a medical student to qualify as a surgeon is to be cut by almost half in an effort to boost numbers and encourage more women to take up the specialty. Under the current medical curriculum, junior doctors must complete at least 12 years of postgraduate training to become a consultant surgeon. Major reforms of the tuition process, outlined yesterday by the Royal College of Surgeons, will allow trainees to be fast-tracked to consultants in as little as seven years.

The new system, which could see fully qualified surgeons as young as 30, is designed to speed the rise of junior doctors set on surgical specialties, most of whom currently spend years in general medical training. It is also hoped that the timetable - which will let doctors opt out and then rejoin the training programme - will also encourage more women into surgery who had feared sacrificing the chance to have children.

Hugh Phillips, president of the Royal College of Surgeons, said that it was vital that an outdated curriculum was overhauled to guarantee the highest quality of surgeons for future generations. Instead of leaving doctors drifting for years in junior roles, the new system would target those with an aptitude for surgery and fast-track them into their desired specialty, he said. "The arrangement for training is not efficient," he said. "How can we possibly accept a situation where young people spend up to five years at the level of a senior house officer without any sign of progress?" At present there are more than 3,500 senior house officers waiting to become specialist registrars - when a junior doctor develops surgical specialties - but less than half will eventually progress to this stage. Under the new system, they will be able to progress in just two years. "There are too many talented surgeons-in-training stuck at this grade," Mr Phillips said. "Not only is this wasteful of human resources, it makes for an insecure and difficult time at a crucial stage in the surgeon's career."

The new curriculum will be introduced in 2007, with pilot schemes due to start in England and Wales from next year. Mr Phillips, an orthopaedic surgeon, said there was also an urgent need to address the work pressures created by government targets that were preventing consultants from spending time passing on their expertise to junior doctors. "There is now an incentive which gives surgeons œ100 for treating an additional patient (to help to meet government targets)," he said. "I would rather surgeons were incentivised to train instead of taking the extra case. It may not appeal to ministers, but it has got be the way forward."

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Thursday, October 28, 2004

Speaking of which, if there's four words I never want to hear again, it's "prescription drugs from Canada." I'm Canadian, so I know a thing or two about prescription drugs from Canada. Specifically speaking, I know they're American; the only thing Canadian about them is the label in French and English. How can politicians from both parties think that Americans can get cheaper drugs simply by outsourcing (as John Kerry would say) their distribution through a Canadian mailing address? U.S. pharmaceutical companies put up with Ottawa's price controls because it's a peripheral market. But, if you attempt to extend the price controls from the peripheral market of 30 million people to the primary market of 300 million people, all that's going to happen is that after approximately a week and a half there aren't going to be any drugs in Canada, cheap or otherwise -- just as the Clinton administration's intervention into the flu-shot market resulted in American companies getting out of the vaccine business entirely....

The Continental health and welfare systems John Kerry so admires are, in fact, part of the reason those societies are dying. As for Canada, yes, under socialized health care, prescription drugs are cheaper, medical treatment's cheaper, life is cheaper. After much stonewalling, the Province of Quebec's Health Department announced this week that in the last year some 600 Quebecers had died from C. difficile, a bacterium acquired in hospital. In other words, if, say, Bill Clinton had gone for his heart bypass to the Royal Victoria Hospital in Montreal, he would have had the surgery, woken up the next day swimming in diarrhea and then died. It's a bacterium caused by inattention to hygiene -- by unionized, unsackable cleaners who don't clean properly; by harassed overstretched hospital staff who don't bother washing their hands as often as they should. So 600 people have been killed by the filthy squalor of disease-ridden government hospitals. That's the official number. Unofficially, if you're over 65, the hospitals will save face and attribute your death at their hands to "old age" or some such and then "lose" the relevant medical records. Quebec's health system is a lot less healthy than, for example, Iraq's.

THE SUREST WAY TO SAVE PRIVATE HEALTH-CARE

You can have universal coverage without the government running ANY hospitals

In an ABC News/Washington Post poll last fall, 62 percent of the respondents favored a universal, government-run medical insurance program. Such surveys reflect a widespread frustration with a health care system that is too expensive, too uncertain, and too complicated. The answer proposed by John Kerry and John Edwards is to continue the creeping socialization of medicine that Americans have been experiencing since the 1960s. That course would mean the end of private health care in the U.S., and with it the unparalleled medical progress that has benefited patients in this country and throughout the world. It would have a disastrous impact on medical innovation and the quality of care....

When it comes to health care policy, Republicans are Democrats Lite. "The Republicans always say, `We're going to give you the same program, only less than that proposed by the Democrats,'" says Tom Miller, former director of health policy studies at the Cato Institute. "Republicans just offer cheaper, more apologetic programs." Witness the new Medicare drug benefit, which John Kerry immediately denounced as "a raw deal for America's seniors and a big windfall for the big drug companies." No matter how much they give away, Republicans can never give away enough to satisfy the demands of the nationalized health care advocates.

Since it's unlikely that Americans will allow their improvident neighbors to expire without medical care in the streets, is there a politically palatable alternative that can preserve and expand private medicine in the United States? Yes: mandatory private health insurance. The New America Foundation, a liberal policy shop in Washington, D.C., has outlined some elements of how such a system would work. The slogan for its proposal is, "Universal coverage in exchange for universal responsibility." The devil is in the details, of course, but the plan offers some interesting possibilities. For example, mandatory health insurance coverage might be combined with medical savings accounts that would encourage people to save and invest for future medical emergencies.

The New America Foundation proposal preserves private insurance and allows consumers to choose among competing insurance plans and coverage options. Most intriguingly, the plan offers a way out of the dysfunctional employer-financed third-party-payer model that is so grievously distorting our health care system. Employers eventually would devolve responsibility for health insurance to their employees by giving them the money the companies currently pay to insurance companies. Employees would then have a strong incentive to shop around for the best health care deals, putting pressure on insurers to keep costs low.

Even some Republicans are suggesting that mandatory health insurance be required for at least some Americans. Senate Majority Leader Bill Frist (R-Tenn.) recently argued that it is unfair to expect taxpayers to pick up the health care tab for the third of Americans without health insurance who make incomes over $50,000. "I believe higher-income Americans today do have a societal and personal responsibility to cover in some way themselves and their children," the senator said in a speech at the National Press Club in July.

Uninsured Americans currently receive health care for which they don't have to pay. Their bills are paid by tax dollars spent on Medicaid or the state Children's Health Insurance Programs, or through higher insurance premiums and medical charges to make up for the losses doctors and hospitals incur when they treat the uninsured. Why shouldn't we require people who now get health care at the expense of the rest of us to pay for their coverage themselves?

There's a big bonus. "Mandated coverage would replace Medicaid and state Children's Health Insurance Programs because lower-income and unemployed people would receive a voucher to purchase private health insurance," says Wharton's Mark Pauly. "This would mean full privatization for people under age 65." He holds out an even brighter prospect: "Actually, in principle, mandated coverage could replace Medicare too." The entire medical system could be privatized. The slowly expanding Medicare, Medicaid, and S-CHIP behemoths that are inexorably absorbing more and more of the U.S. health care system could be eliminated.

Mandatory health insurance would be not unlike the laws that require drivers to purchase auto insurance or pay into state-run risk pools. They also resemble the libertarian Cato Institute's proposals for reforming Social Security, which do not eliminate mandatory payments; they privatize them. Similarly, school voucher plans generally mandate that children receive an education. As the Rose and Milton Friedman Foundation notes, universal school vouchers would allow "all parents to direct funds set aside for education by the government to send their children to a school of choice, whether that school is public, private or religious." This system separates "the government financing of education from the government operation of schools."

Once government and health insurers have defined a standard basic package of health care benefits, the current dynamic of constant government meddling in health insurance and health care markets that leads to higher and higher costs should change. Consumers, transformed from passive recipients into direct purchasers, can be expected to be vigilant about government interference that would increase their rates or reduce their services.

As Rep. Bill Thomas (R-Calif.) noted at a recent National Center for Policy Analysis conference, if everyone had to buy his or her own coverage the way people buy car or homeowner's insurance, and if the size of the tax breaks didn't hinge on employment status, you would have the beginnings of a real market. Thomas said he wanted to make basic, low-cost catastrophic health care coverage widely accessible through tax subsidies and credits. More-extensive coverage would be available to individuals who wanted it, but they would have to pay for it with after-tax dollars.

Under a mandatory insurance scheme, all Americans would be required to purchase a basic high-deductible catastrophic health insurance policy from a private insurance company. "Let's say you cap the deductible at $4,000 and set a limit that out-of-pocket health care costs can't exceed 10 percent of an individual's or family's income," suggests Pauly. "That would mean that a family earning $30,000 per year would receive $1,000 in a health voucher." In other words, the family would pay the first $3,000 of medical expenses out of pocket and receive a $1,000 voucher to cover expenses up to the $4,000 deductible.

A high deductible would encourage people to be more careful about the services they purchase. They would shop around for good deals on drugs and scrutinize the costs of various treatment options more closely. Of course, some people inevitably would try to save a penny or two by delaying a visit to the doctor for their stomachache, only to find out later that it's cancer, but no system can make people perfectly prudent.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Wednesday, October 27, 2004

WOW! NOW THIS IS SOCIALIZED MEDICINE AT ITS FINEST!

"Poland -- Prosecutors have charged two doctors and two ambulance workers with murder for letting patients die or killing them outright in order to collect kickbacks from funeral homes, officials said Wednesday.

The four defendands were charged in a total of 19 deaths. Under the alleged scheme, funeral homes in the central city of Lodz paid the emergency workers bribes to give them early tip-offs about deaths so the homes could snap up clients. Prosecutors say the defendants went a step further and killed patients.....

A 35-year-old ambulance crew member is accused of killing four patients with injections of a muscle relaxant and informing funeral homes of the deaths in exchange for a total of least $6,200, prosecutors said....

In 2002, police launched an investigation into ambulance staff suspected of taking bribes from funeral parlors. The investigation grabbed national attention after Polish media aired allegations that some crews may have delayed ambulance arrivals or administered drugs that resulted in the death of severely ill patients. State officials have acknowledged the system is prone to corruption. They blame low pay for government-employed medical workers and a lack of laws regulating intense competition among funeral homes".

"High levels of anger, starved of funds, staff not sure if anyone is in control: two major Sydney hospitals have been diagnosed with severe internal problems. At Royal North Shore Hospital, where morale has been battered by 10 years of funding cuts, rivalries have sprung up between doctors and anaesthetists and medical staff no longer trust management, an independent report has found. The report also found Ryde Hospital no longer had the resources to sustain emergency surgery, which should be abolished or limited to simple daytime procedures. Staff were "uncertain that anyone is actually in control at the level of middle management".

Last night the Health Minister, Morris Iemma, said he was shocked by the report, and said he had no idea about the state of the operating and surgical services at the two hospitals. "[The health system] is a big and complex system. My job is to get involved and do something to correct these issues when they are raised," he said. Mr Iemma denied funding had been run down at North Shore and said management denied some of the report's allegations, but he would accept its recommendation to convene immediately a restructuring committee to be chaired by North Shore's general manager, Deborah Latta.....

The report said North Shore medical staff believed management emphasised revenue raising over treatment and was dishonest in its explanation of cuts to services. Growth of adjoining private hospitals, carrying out procedures North Shore would once have charged for, had starved it of revenue. Senior management had no strategic vision, while surgical clinical committees overseeing the allocation of resources were so disaffected they had simply ceased making decisions. Some doctors believed the hospital's anaesthetics section "was managed by anaesthetists for anaesthetists". Doctors' lack of control over or input into decision-making had led to a "high level of anger and frustration at the situation" exacerbated by the simultaneous growth of the private hospitals.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Tuesday, October 26, 2004

A SLIGHT DEREGULATION OF MEDICINE IN BRITAIN

"Pharmacists in England and Wales could offer some health services currently provided by GPs, under a new deal agreed with the government. These would include supplying repeat prescriptions, offering basic health advice and blood pressure checks. Chemists would be paid by the NHS according to the range and quality of services they provided. Pharmacists now have to vote on whether to accept the new contract, which would come into force next April.

The document has been drawn up after two years of talks between the Department of Health and pharmacists' representatives. Speaking ahead of a meeting of the all-party parliamentary pharmacy group, health minister Rosie Winterton, said: "This new contract represents the beginning of a new era for pharmacy in the community, in which everyone will benefit... "Until now, pharmacists have been an untapped resource. I want to see them more integrated with the NHS family."

Under the new contract, patients will be able get up to a year's worth of prescriptions from their GP at a time. This will be dispensed at intervals agreed between the doctor and pharmacist. According to Ms Winterton, this will reduce GP workloads and relieve patients with chronic conditions from having to repeatedly visit their surgery.

The chairman of the Pharmaceutical Services Negotiating Committee, Barry Andrews, said: "I am pleased that we have been able to reach agreement with the government on proposals for a new pharmacy contract that will provide better services for patients, better use of the skills of pharmacists, and a more secure future for community pharmacy contractors."

This is just common sense. No one with chronic hypertension should have to go to a doctor just to get a prescription refill. And Wal Mart has BP machines - why not pharmacists?

Unfortunately, this is one more area where such a policy would probably be squeezed out in the USA by litigation - pharmacists may not want to be liable if a patient doesn't take his medicine reliably, takes cocaine (which could lead to a stroke, and then blame the pharmacist for not giving him the correct meds, etc..).

Also, a lot of other "baggage" goes along with hypertension - coronary artery disease, peripheral vascular disease, heart attacks, heart failute, obesity, diabetes, etc.. The pharmacist may be liable for not diagnosing such things etc.

In a rational society, patients would have the option to visit the pharmacist instead of the GP to have his BP checked etc.. But then the pharmacist would have to be immune from liability for not diagnosing diabetes etc. So add this to the list of reasons why American medicine is so expensive: Threat of litigation REDUCES COMPETITION.

AND IN AUSTRALIA THE DOCTORS STRIKE BACK

Doctors will seek authority to dispense prescription medicines to their patients after pharmacists asked the Federal Government to allow them to perform some of the basic functions of GPs.

The Pharmacy Guild of Australia yesterday revealed it was entering negotiations with the Government to extend the role of pharmacists so they could administer vaccines and help monitor conditions such as diabetes and high blood pressure. Pharmacy Guild president John Bronger said any proposal to take pressure off GPs at a time of doctor shortages should be seriously examined. Giving pharmacists the extra powers would amount to evolutionary rather than revolutionary change, he said. The Pharmacy Guild would not be asking for drug-prescribing powers.

However Australian Medical Association president Bill Glasson labelled the plan "mischievous and irresponsible", adding that it was an insult to general practitioners and an unnecessary threat to the nation's high standard of primary care.

Payout caps are a poor substitute for reponsible judges but when judges think that they are Father Christmas (with other people's money) what choice is there?

Amendment D would give the Legislature the power to limit the amount of noneconomic damages in medical malpractice lawsuits. Noneconomic damages generally involve such things as pain and suffering or mental anguish. Economic damages, including loss of past and future pay, past and future medical costs, repair and replacement costs, would not be affected by the amendment. If voters approve the amendment, the Legislature would be charged with deciding a cap on the dollar amount that could be awarded for noneconomic damages.

A companion amendment, Amendment C, would allow lawmakers to establish a panel to review a medical malpractice case before it reaches the courts. The two amendments are among four that voters will decide on Nov. 2. For a constitutional amendment to pass in Wyoming it needs only a simple majority of votes cast in the general election.

Opponents of the amendments C and D, led by trial lawyers, argue Wyoming residents are being asked to surrender the right to collect all possible damages for injury or loss caused by medical negligence. They say Wyoming has not had any large malpractice damage awards to warrant such a drastic move.

Supporters, led by doctors, contend that unchecked malpractice awards are driving up insurance costs for doctors and driving them from the state, particularly its rural areas. They contend caps will help slow the rapid rise in premiums. A medical review panel would cut down on costly frivolous lawsuits, they say. Alarmed by news of doctors pulling up practices or retiring early, leaving some communities without medical care, the Legislature held a special session last summer where legislators overwhelmingly approved putting the constitutional amendments on the ballot. Gov. Dave Freudenthal, a lawyer, supported the amendments, saying it should be up to voters which direction the state should take.

Shauna Roberts, spokeswoman for Citizens for Real Insurance Reform, which opposes the amendments, contends capping damage awards is not going to help doctors. She noted that nine states that passed damage caps in 2003 all had subsequent premium increases. "The evidence is not at all conclusive that putting caps on noneconomic damages does anything for rates," Roberts said. She also contends that the argument doctors are leaving Wyoming is incorrect.

Citing numbers supplied by the state Legislative Service Office, Roberts said Wyoming had a total net increase of 238 direct patient care doctors since 1994. But Wendy Curran, executive director of the Wyoming Medical Society, which represents the state's physicians, contends the numbers don't mean much to a community with no obstetricians or surgeons. "What we do know is that if you live in Gillette, where there is only one surgeon and where they are having difficulty recruiting new surgeons, you might not think there's enough doctors in the state," Curran said.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Monday, October 25, 2004

LEGAL AID BAD FOR HEALTH

Poor people in Britain are given free legal services AND are exempt from paying the other side's costs if they lose. So they sue their hospitals with gay abandon: Nothing to lose. And the hospital pays up because it is cheaper than fighting the case. And the money that should be paying doctors and nurses goes to lawyers. Great system, this socialism!

It is a popular misconception that civil legal aid means access to justice. It doesn't - many people don't qualify. Civil legal aid provides access to lawyers for the eligible minority who can bring doubtful cases without risk. This is amply borne out by the dismal success rates of cases against the health care industry. Too often lawyers and claimants simply walk away from the wreckage of failed legally aided litigation, the lawyers the only winners. We pay twice, first through legal aid and again by the damage to our health system.

All patients injured by negligent treatment are rightly entitled to compensation, not just those who qualify for legal aid; there must be access to justice for all. However, this has to be set against the health budget's purpose of treating patients. How can it be done fairly and sensibly?

There is widespread concern about the cost and conduct of clinical negligence cases. The Legal Services Commission and the Conservative Party have recently published consultation papers. They propose limiting legal aid to investigating the case. Any court action can be funded by conditional fee arrangements ("no win, no fee"). Commercial prudence provides an inbuilt incentive to pursue worthwhile claims. Moreover, the usual 'loser pays' rule applies whereby the loser pays the winner's legal costs (it does not apply in legally aided cases). This sensible rule encourages cases to resolve according to their merits: weak cases are abandoned and strong cases are settled. Successful health service defendants can recover costs, thereby protecting funds for patient care. Insurance cover is available to claimants for this potential liability.

Conditional fees and the loser pays rule together ensure that the risks of litigation are balanced between the parties, and promote fairness of the legal process. There should be no more legal aid blackmail, where speculative cases are settled by defendants to avoid high irrecoverable trial costs.

This combined public and private funding recognises the expense of investigating medical cases whilst drawing on the strengths of the conditional fee system. Access to justice will be widened, weak cases will be discouraged. No system can be perfect, but the proposed reform seems best at balancing the competing considerations of compensating victims of negligence and protecting funds for patient care.

A British government attempt at half-hearted mimicry of the private sector was always a laugh

The Government's flagship policy to create foundation trusts, granting the best hospitals financial independence, was dealt a serious blow last night after it emerged that a leading trust has slid into a o5 million spending deficit in just three months. A team of American accountants has been called into Bradford Teaching Hospital NHS Trust to draw up an emergency finance plan just six months after it became one of the first hospitals to be awarded foundation status.

When Bradford was vetted by the Government and an independent regulator before its appointment in April, hospital chiefs forecast a 1 million pound budget surplus by the end of the financial year. By July this had been revised to a 4 million pound deficit, The Times has learnt.

Politicians and health leaders last night gave warning that many more hospitals would face similar problems because the Government had not foreseen the consequences of imposing numerous new finance schemes on the NHS. They expressed concerns that the debts would impact heavily on patient care as trusts fought to recoup their funds. Of the 20 hospitals that have been granted foundation status to date, four have already dropped from three to two stars in the performance ratings. The government-appointed regulator originally said that any hospital that lost a star would lose its foundation status, but it has yet to act on the pledge.

Monitor, the independent regulator of foundation trusts, announced yesterday that Alvarez and Marsal, a firm of financial recovery experts, was being called in to avoid Bradford plunging further into the red. The regulator said that the company, which helped to wind down the bankrupt accountancy giant Arthur Andersen, would work with the trust's board of directors to assess the current financial position and develop future plans. Alvarez and Marsal's fee will also be paid by the trust, the regulator said.

Frank Dobson, the Labour MP and former Health Secretary, described the move as a very worrying development and an ill omen of the financial problems to come. He said that it revealed serious shortcomings in the way that hospitals were being vetted to become foundation trusts. "Even I never imagined things would get in a mess this quickly. If we lived in a rational world, it might make the Prime Minister pause for thought," he said. "It may be necessary to spend money on financial consultants now to rescue the situation at Bradford, but perhaps there should be experts looking at the regulator who gave them a clean bill of health just six months ago."

Andrew Lansley, the Conservative health spokesman, said: "What this illustrates is that the whole sector is going to face real turbulence. The Government is trying to impose very large changes all at once, and all of them have significant financial consequences which will combine in ways that are very difficult for hospitals to manage."

The move by Monitor is the first time that the regulator has used powers under Section 23 of the Health and Social Care (Community Health and Standards) Act 2003 to intervene in foundation trust finances. Bradford was made a foundation trust in April in the first wave of the Government's controversial scheme for high-flying hospitals. Foundation trusts remain part of the NHS but are given more control over how they spend their money, are able to borrow capital to fund projects and give local people a say on their governing bodies.

But critics of the scheme claim it creates a "two-tier" NHS with greater divisions between the best and worst hospitals. Bradford's board of directors has agreed to work with the regulator and the external advisers to identify the causes of its underperformance and implement actions to tackle them. Paul Earp, its finance director, resigned two weeks ago. It is understood that, after seven successful years at the trust, he became exasperated at the financial problems it now faced.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Sunday, October 24, 2004

"We don't have to imagine what would happen under Kerry's Medicaid expansion plan. All we have to do is look south, to Tennessee to see the Kerry plan in live action. Since 1994, Tennessee has provided state-funded healthcare with the same eligibility requirements as the Kerry plan. Nine years later the state's governor was calling it the dragon that eats everything, and financial management consultants were warning that by 2008 the program would consume $9 out of every $10 in new revenue taken in by the state. That's a lot of money, money that won't be available for other essential state-provided services.

And yet, despite spending all of that money, Tenncare patients still end up getting the shaft. In the grand American tradition, the program shunned rationing, covering everything from lava lamps to MRI's. The programs generosity, however, did not include doctors and hospitals, whose reimbursement rates are so low that seeing Tenncare patients is a losing proposition. As a result, access to care is a very real problem for Tenncare patients, some of whom have to drive 40 miles just to see a doctor. (And keep in mind, those are mountain miles.)

And what about the children? Only 19% of pediatricians in Tennessee accept Tenncare, the lowest participation rate of any state in the union. As a result, over one-third of children enrolled in Tenncare have trouble finding a doctor. That's a very real problem. And one that's much more serious and damaging to a child's health than lack of insurance.

But under Kerry's Tenncare National, access to care would be even worse. The median family income in the U.S. is $53,991. Three hundred percent of the poverty level for the average family of four is $56,500. Under Kerry, over half of America's families would qualify for the expanded Medicaid coverage. Which would mean that doctors would see their reimbursement drop drastically - to the point that they would have trouble staying in business. You can't squeeze blood from a rock, and the fact of the matter is that the safety margin of the average physician's practice is already razor thin, thanks to the medical liability crisis. And there's no reason to think that a Kerry/Edwards administration is going to enact any meaningful medical liability reform, not with donors like these. With most of the country struggling with rising malpractice insurance premiums, there's just no room for physicians and hospitals to provide mandated charity care for the middle class. The heart may be willing, but the purse won't allow it.

The pincer movement of Kerry's healthcare plan and trial lawyer friends would squeeze doctors right out of the picture. Those physicians who can would retire early, as many already are. Others would probably leave medicine all together. Hospitals that can't make up the difference by soaking the rich would close, as many small community hospitals did under the onslaught of managed care in the 1990's. But in this case, it wouldn't just be rural and inner city hospitals, it would also be suburban and small city hospitals. Only the large tertiary care centers, like Mass General and The Cleveland Clinic, who attract the wealthy the world over would stand a chance. And the future would be even bleaker. Who wants to invest the time and money to go to medical school if it's financially impossible to pay back student loans? The healthcare industry is leading employers in the U.S. Fewer hospitals and doctors not only means less access to care - it means higher unemployment rates. A vote for Kerry is anything but a vote for nurses. And it certainly isn't a vote for children. More people may have healthcare insurance under Kerry's plan, but they'll have a much harder time finding somewhere to use it.

In the last debate Kerry called our current healthcare insurance system high-priced but low-benefit. The implication was that his plan would be low-priced and high-benefit. But everything has a price, and Kerry's is higher than we can afford.

IF IT'S FREE IT GETS USED BY PEOPLE WHO DON'T REALLY NEED IT

A new study on emergency rooms disputes the common wisdom that the poor and uninsured are filling them up. In fact, more than 80 percent of patients seen in emergency rooms have health insurance and a usual source of health care such as a primary care physician, doctors reported on Tuesday. "Contrary to popular perception, individuals who do not have a usual source of care are actually less likely to have visited an emergency department than those who have such care," said Dr. Ellen Weber, an professor in the division of emergency medicine at the University of California San Francisco, who led the study.

For the study, Weber and colleagues looked at interviews of nearly 50,000 adults visiting emergency departments in 2000 and 2001. People without health insurance were no more likely to have had an emergency visit than those with private health insurance, they told a meeting of the American College of Emergency Physicians. People without a regular doctor or clinic were 25 percent less likely to have had an emergency visit than those with a private doctor, the researchers found. Their study, also published in the Annals of Emergency medicine, found that 83 percent of emergency department visits were made by people who had a doctor, clinic or were members of a health maintenance organization. Eighty-five percent had medical insurance and 79 percent had incomes above the poverty level. "The mistaken belief that emergency departments are overcrowded by a small, disenfranchised portion of the U.S. population can lead to misguided policy decisions and a perception by hospital administrators that emergency patients are not as valuable to the institution as patients having elective surgery," Weber said in a statement. "But our findings indicate that emergency departments serve as a safety net, not just for the poor and uninsured, but for mainstream Americans, and in particular those with serious and chronic illness."

A spokesman for the American Hospital Association said he was studying the report but added, "That is not surprising because a majority of people have insurance." An estimated 45 million Americans lack health insurance, but that leaves 85 percent of the population with coverage, either public or private.

Hospitals have long complained that their emergency rooms are overcrowded. Between 1992 and 2002, emergency department use climbed 23 percent, from 89.8 million visits to 110 million visits. The 1986 Emergency Medical Treatment and Labor Act requires any hospital taking part in Medicare -- the state-federal health care insurance program for the elderly and disabled -- to provide "appropriate medical screening" to anyone showing up at an emergency room and asking for it. Hospitals say the rules have burdened their emergency departments with poor and uninsured patients seeking care for everyday conditions. Many have closed emergency facilities in recent years. "Many insurance programs, and particularly public and private HMOs, require beneficiaries to have a primary care physician, which may be expected to improve overall health and health care," Weber said. "But the continued rise in emergency visits implies that such programs have not had a substantial impact on overall emergency department use."

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Saturday, October 23, 2004

GREAT NEWS FOR LIBERTARIANS

If you don't have a right to decide what you do with your own body, what right do you have?

A Colorado man underwent a kidney transplant Wednesday in what is believed to be the first such operation involving an organ obtained through a for-profit Web site -- a transaction that has raised legal and ethical questions.

Presbyterian/St. Luke's Hospital spokeswoman Stephanie Lewis said the surgery was going well and the vital signs of both the donor and recipient were good. The operation, which began at about noon, was scheduled to last about four hours.

Before the operation, Bob Hickey, 58, met with Dr. Igal Kam, the surgeon whose objections initially postponed the transplant. The meeting was described as a time for "healing the scars of the last several days." Kam suddenly cancelled Monday's transplant operation after learning that Hickey had met his donor, Robert Smitty, 32, of Chattanooga, Tenn., through a Web site called MatchingDonors.com. Smitty agreed to give Hickey one of his kidneys before the two men ever met. The hospital later said the operation was only "postponed."

MatchingDonors.com, based in Canton, Mass., charges varying fees -- sometimes $290 a month -- to post profiles of people looking for live organ donors.

Hickey, of Edwards, Colo., has needed a transplant since 1999 because of a kidney disease. He said he was tired of waiting on the national donation list. Within three months of posting his profile on the Web site, he received 500 offers for donations.

The hospital's Clinical Ethics Committee met on Tuesday to evaluate concerns about the transplant, including whether either Hickey or Smitty stood to profit from the arrangement. The panel later advised the hospital to make a compassionate exception, once both men had signed statements indicating that neither would benefit financially. "We're pleased we were able to resolve this quickly with a compassionate exception. But it's also important to note that organ donations continue to be the topic of a broader national debate and more answers are needed," Mimi Roberson, chief executive of P/SL in Denver, said in a statement.

Britain's public hospitals are full of MRSA -- largely because of lax hygeine

A small British firm says it is testing a compound that could help destroy the hospital superbug MRSA, a bacterium that is impervious to conventional antibiotics. Pharmaceutica, an 18-month-old firm in Worcestershire, western England, is testing a glycine compound on mice infected with methicillin-resistant Staphylococcus aureus (MRSA), the British weekly New Scientist says in next Saturday's issue. The substance, which Pharmaceutica calls BTA19976A, has been tested on MRSA in lab dishes. It is thought to work by altering the composition of the cell wall, preventing a key enzyme, PBP2a, from reinforcing that structure. With its cell wall weak, the bug can be killed by normal doses of methicillin, the antibiotic to which it is usually resistant.

MRSA is a serious problem for hospitals, where it is now responsible for up to 60 percent of all infections by the S. aureus microbe, usually entering through wounds, catheters and tubing. S. aureus infections cause abscesses and boils and can lead to pneumonia or fatal blood poisoning. People who become infected with MRSA are often treated with vancomycin, one of the small number of last-resort antibiotics whose use is carefully controlled in order to prevent the emergence of new resistant strains.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Friday, October 22, 2004

YOUR BUREAUCRACY WILL PROTECT YOU

In reality, nobody gives a damn -- ever AFTER negligence is discovered

Campbelltown Hospital, in Sydney's southwest, was forced to apologise yesterday to a patient who became seriously ill when a gauze pack was left inside her after the birth of her first child. First-time mother Kellie Van Gool gave birth to her daughter in January, but for days afterwards experienced pain so intense she was unable to sit down. She developed an infection and after further investigation, doctors found the surgical gauze pack was left inside her.

Mrs Van Gool and her husband Wally yesterday lodged a formal complaint with the Health Care Complaints Commission. NSW Minister for Health Morris Iemma said safety procedures at Campbelltown Hospital had changed since the incident. "Dr David Saxton, head of obstetrics at Campbelltown Hospital, has today advised me that as a result of the experience of Ms Kellie Van Gool at Campbelltown Hospital on January 7 this year, the hospital has reviewed its surgical equipment counting practices and changes have been made to prevent a repeat of this incident," Mr Iemma said. "Mrs Van Gool's poor experience appears to have been made worse by difficulty in presenting a complaint to the hospital. However I am advised that hospital did meet with Mrs Van Gool on January 14. "If the complaint process has let the patient down, then I am determined to ensure that the process is improved."

Details of the incident come two years after nurses at Campbelltown and Camden hospitals first went public with allegations that mistakes and sub-standard care had caused patient deaths at the hospitals. However, the hospital said yesterday that full disclosure was made to Mrs Van Gool at the time the gauze was discovered. "It appears now that we have had a breakdown in communication and we would like to apologise again," Dr Saxton said.

Opposition Leader John Brogden said disciplinary action should be taken against the hospital's then acting general manager, who he claims failed to contact Mrs Van Gool despite her calling three times to lodge a complaint. "Joanne Fisher needs to explain why she refused to contact Kellie and she also needs to unreservedly apologise... Despite the rhetoric being peddled by the Government that things are getting better in the South Western Area Health Service, Kellie Van Gool's experience proves nothing has changed."

I have received the following email but have not been able to confirm its accuracy:

Almost half of the nation's flu vaccine will not be delivered this year. Chiron, a major manufacturer of flu vaccine, will not be distributing any influenza vaccine this flu season. Chiron was to make 46-48 million doses vaccine for the United States. Chiron is a British company. Recently British health officials stopped Chiron from distributing and making the vaccine when inspectors found unsanitary conditions in the labs. Some lots of the vaccine were recalled and destroyed.

The major pharmaceutical companies in the US provided almost 90% of the nations flu vaccine at one time. They did this despite a very low profit margin for the product. Basically, they were doing us a favor.

In the late 80's a man from North Carolina who had received the vaccine got the flu. The strain he caught was one of the strains in that years vaccine made by a US company. What did he do? He sued and he won. He was awarded almost $5 million! After that case was appealed and lost, most US pharmaceutical companies stopped making the vaccine. The liability out weighed the profit margin. Since UK and Canadian laws prohibit such frivolous law suits UK and Canadian companies began selling the vaccine in the US.

By the way...the lawyer that represented the man in the flu shot law suit was a young ambulance chaser by the name of John Edwards.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Thursday, October 21, 2004

The FDA has a famously tight regulatory regime, made even tighter in the late 90s, and as a result the United States has only two approved manufacturers of flu vaccine while Britain has half a dozen. (Although, ironically, it's worth noting that a breakdown of the regulatory regime seems to be a more likely explanation for Chiron's immediate problem.) The bottom line is that there are other flu vaccine manufacturers besides Chiron and Aventis, but they don't sell into the U.S. market because the cost of complying with FDA regulations is higher than the narrow profits they could expect to make from selling flu vaccine.

And Drum's follow-up post is good too. I reproduce it in full below -- and the comments on the post really drive home how indefensible the FDA is in the matter

FLU VACCINE UPDATE....Two companies say they may jump into the U.S. flu vaccine market next year:

GlaxoSmithKline, the largest vaccine maker in the world, and ID Biomedical, a small Canadian company, have announced plans to sell flu shots in the U.S. ID Biomedical could enter the market as soon as next year.

....The competitive interest in making flu vaccines could dispel the notion that there is no money to be made in the business. In fact, over the last five to six years, the wholesale price of a flu shot has jumped to more than $8 from less than $2, far outpacing increases in production costs. What's more, the market is growing...."It is a very attractive business," said Anthony Holler, ID Biomedical's chief executive.

....U.S. public health officials have said they are unsure the FDA could move swiftly enough to approve the shots. The FDA will clear a drug only if the manufacturer can demonstrate that the product is safe and effective, a process that typically takes years.

So: demand is high and growing; prices have quadrupled recently, which means government price caps aren't an issue; and it's an "attractive business," which mean liability lawsuits must not be scaring anyone too badly.

However, FDA approval could be a problem. This leads me to think that my tentative conclusion yesterday was probably correct: out of all the reasons on offer to explain why the United States relies on only two main suppliers for its flu vaccine supply (small market, low price, risky business, lawsuit worries), it's probably FDA regulatory hurdles that explain the most.

Are those hurdles reasonable? I don't know. But it does seem as if they're the most likely reason that the United States, with a huge market, has only two approved suppliers, while Britain, with a market 10% the size, has half a dozen.

Needless to say, there is no shortage of flu vaccine in Australia either. I recollect that there was a shortage of some vaccine in Australia a while back but we just bought in a whole lot of extra shots from Britain to fix the problem in comparatively short order. Australians did not think that their regulators were the sole source of wisdom in the matter

Americans have been shocked to learn a flu-vaccine shortage will keep many of them from getting their flu shots this year. They shouldn't be. What they are experiencing is the effect of the most basic law of economics. Guess what? When it ceases to be profitable to make a vaccine (or a prescription drug, or anything else), companies stop making it.

Litigation, regulation and government pricing have hammered vaccine makers during the past two decades, chasing them out of business. Democrats "have a plan" -- as John Kerry would put it -- in response to the flu-vaccine debacle, which is to bring the same model of failure to the prescription-drug market and make it just as unprofitable. Then there will no longer be any of those "greedy" pharmaceutical companies. Problem solved!

In the 1980s, many vaccine makers were driven out of business by litigation costs. Congress eventually passed legislation protecting vaccine makers from out-of-control lawsuits. But the damage had been done. Once a company gets out of the business, it is difficult to get back in because it loses its manufacturing capacity and its expertise.

Another blow came from Hillary Clinton. She championed getting the government into the pediatric vaccine business in a big way in the 1990s. It now buys 60 percent of pediatric vaccines, dictating cut-rate prices that have dried up vaccine-manufacturing capacity. More regulation inevitably accompanied the government purchases. "It's a snowball effect of more and more regulation over the past decade, driving more and more vaccine makers out of business," says Grace-Marie Turner, president of the free-market-oriented Galen Institute.

On top of these regulations, the flu-vaccine business has its unique hurdles. As Scott Gottlieb of the American Enterprise Institute points out, the vaccine for each flu season needs to be set a year in advance because the vaccine is developed in chicken eggs in a cumbersome, dated and very expensive process. Just as with pediatric vaccines, there's a lot of government purchasing, which keeps prices low.

Companies have to sell tens of millions of doses to make a profit. Since the entire U.S. market at its maximum is about 150 million doses, it means there is room for only two or three suppliers, and therefore no margin for error. Worse, vaccine makers have to take back any unused vaccines (usage can vary widely year to year), eating the production costs and exposing themselves to millions of dollars in annual losses. The setup is based on the idea that manufacturers are doing a public service by providing the flu vaccine, considerations of profit be damned. "It's a market that hasn't been allowed to make a profit and not allowed to innovate," says Gottlieb. Without innovation, vaccine makers can't engage in premium pricing based on changes that make their product better than the competition. Everyone is stuck with the same old method.

Flu-vaccine makers could move to a more efficient process involving monkey or human cell lines instead of chicken eggs, but the Food and Drug Administration -- which imposed new regulations in 1999 that drove several flu-vaccine makers out of the business --has been nervous about approving the new techniques. Rather than more government intervention, what vaccine manufacturers need is the government's permission to innovate so they can move beyond the inefficiencies of the current system.

The vaccine market is a harbinger of what could happen to the prescription-drug industry if Democrats get their way. They are agitating for the government to be able to negotiate -- read: mandate -- low drug prices as part of the new Medicare prescription-drug benefit. And the push for re-importation of drugs from Canada is really a way of importing Canada's price controls into this country.

But when the government vanquishes profits, it vanquishes the incentive to create new drugs, vaccines and technologies in the first place. This year's flu season might be a brutal, unfortunate reminder of that fact.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Wednesday, October 20, 2004

RISKY BLOOD

Precautions being deliberately ignored in Australian public hospitals generate "mistakes"!

Blood transfusion protocols are being shunned in some hospitals, posing a potentially fatal threat to patient health, a conference has heard. Errors include people being given the wrong blood, mislabelling of blood samples and unrecognised bacterial infection from transfused blood.

To combat the problem, Australia needs to follow England's example and establish a national blood protocol-monitoring body, said Dr Lorna Williamson, a transfusion consultant from Britain who addressed a hematology conference in Melbourne. "Hospitals are very busy places and there's a lot going on and less than perfect habits creep in," she said.

Dr Williamson co-founded the Serious Hazards of Transfusion scheme (SHOT) in Britain, which monitors the number and types of mistakes made along the transfusion supply chain in hospitals.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Tuesday, October 19, 2004

CALIFORNIA PRISON DOCTORS ARE THE DREGS

The state has stripped a Soledad prison doctor's medical license after he failed to diagnose and treat an inmate's spinal injury, resulting in the prisoner's permanent paralysis. An administrative law judge for the state health system found this week that Dr. Isaac Grillo, 72, was a danger to his patients. Grillo, who been practicing at Salinas Valley State Prison, would not comment when reached at his Soledad home Thursday. "I'm not going to talk to anyone," he said.

Grillo was one of three doctors who said they believed inmate Kenneth Holcomb was faking a spinal injury following a June 2000 prison brawl, according to a lawsuit Holcomb filed against the state Department of Corrections. Later, after non-medical officials sent Holcomb to Salinas Valley Memorial Hospital for evaluation, the complaint says, private physicians correctly diagnosed the inmate's injuries and sent him into surgery.

The other two prison doctors involved in the incident also have disciplinary records with the medical board. Dr. David Stuart Clark surrendered his medical license in 2003 to settle a disciplinary action and Dr. David Thor was placed on probation, according to the State Medical Board's Web site.

Grillo's suspension comes as medical care in the state prison system is facing increased scrutiny. In July, a nonprofit prisoner advocacy group issued a report challenging the competence of prison physicians. In September, a judge ordered a complete review of all 261 doctors in the prison system. "The Department of Corrections has been a refuge for doctors who have been unable to provide care in other places," said Alison Hardy, staff attorney at the Prison Law Office, the San Quentin group investigating prison health care. "As a result, there are a lot of prisoners who have been harmed."

Hardy said the Grillo case follows a pattern in the Corrections Department of using doctors practicing outside their specialties. Grillo, a surgeon, was performing internal medicine. Grillo's conduct in the Holcomb case triggered an October 2001 state Medical Board inquiry that resulted in accusations of gross negligence and incompetence. After a two-day examination of Grillo's clinical skills, UC-San Diego professor of medicine Dr. William Norcross concluded that Grillo lacked the knowledge, training and judgment to avoid making potentially serious errors. "The deficiencies documented... if applied to the real-world practice of medicine, would almost certainly have resulted in patient harm, and perhaps even death," Norcross reported.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Monday, October 18, 2004

NO BEDS FOR THE SICK AT AN AUSTRALIAN PUBLIC HOSPITAL

Which in turn ties up ambulances

A confidential document from the Ambulance Service of NSW has revealed that patients are being put at risk at Bankstown Hospital in Sydney due to extensive delays. A memo obtained by The Sunday Telegraph shows two patients had to wait for more than 12 hours, while a further two patients experienced a significant wait after-hours last Wednesday. Patients were unable to be offloaded from ambulance trolleys as no hospital beds were available and ambulance crews were told to stay with patients.

Opposition health spokesman Barry O'Farrell said that the memo highlighted a system in crisis. "The hospital system is placing stress upon patients and ambulance crews," he said. "There is a risk to patients ... placed on ambulance trolleys. In July, there were 14 ambulance crews per shift unavailable and it's because of this sort of thing."

A spokesperson from Bankstown Hospital said staffing shortages and an influx of emergency cases were to blame for the delays. "The important thing is that these patients were with ambulance crews that were within the emergency ward and were receiving constant medical and nursing care," she said.

"Leaving aside medical insurance, for the medical field as a whole I believe that reputation systems would work better than our current system of credential-based regulation. A friend who is an optometrist puts a lot of time into lobbying the state legislature. That is because the boundaries between what he can do relative to an optician or an ophthalmologist are determined by state laws. One group is constantly trying to use the legislative process to take territory away from the others.

These sorts of regulatory boundaries impose tremendous costs on consumers, without our realizing it. Like fish unaware that they are swimming in water, most of us go through life without ever thinking about the pervasive, murky regulatory swamp through which we swim when we seek medical care.

In most industries, government does not get involved in defining work rules. If a company decides to have a financial analyst do computer programming or a computer programmer do financial analysis, that is none of the government's business. In the medical industry, however, the government does dictate such work rules. This creates all sorts of supply bottlenecks. For example, if there is an increase in the number of patients needing help with starting exercise programs to recover from orthopedic injuries, the result is a shortage of "physical therapists." Any other market would adapt by coming up with a close substitute. In medicine, that is not allowed.

Another example is the rule that only a physician may write prescriptions. This protects the income of physicians, but by the same token it prevents lower-cost alternative health delivery systems from emerging. Medical work rules mean that the benefits of what I call The Elastic Economy (chapter 12 in Learning Economics) are not felt in the medical sector. In medical care, supply is rigid, inelastic, and slow to adapt, rather than dynamic and rapidly improving as are other sectors of the economy. Although medical work rules serve primarily to carve out economic rents for health care providers, they are not sold that way to the public. Instead, these regulations ride in under the banner of "consumer protection."

The free market principle is that as consumers we should protect ourselves. The key to protecting ourselves in a deregulated environment for medical care would be reputation systems. As Howard Rheingold discusses in his book Smart Mobs, the concept of reputation systems receives increasing attention in our information-rich, networked society. There are reputation systems all around us. Consumer Reports ratings are a reputation system. eBay uses a reputation system to keep buyers and sellers honest. Mortgage lenders and other suppliers of consumer credit rely on a reputation system known as credit scoring.

In medicine, we already use reputation systems. The diploma on the doctor's wall is one. The referral that is made by friends or other doctors is another. All sorts of private systems are springing up to evaluate data on hospitals, doctors, and so on. Reputation systems could provide us with an alternative to the strict, credential-driven structure that we have today. Someone could earn a reputation as capable of training you to do certain exercises without earning a license as a physical therapist. Someone could earn a reputation as a reliable prescriber for certain types of medications in certain types of situations without getting a full-fledged MD. In fact, the drug industry could be deregulated, with reputation systems for medicines replacing "FDA approval."

If you took away the centrally-planned regulatory system for medical care, my conjecture is that reputation systems would emerge as a more efficient Hayekian market response. In some cases, such as medicines, I would want to see a gradual deregulatory process, rather than lose consumer protection completely and suddenly. Some of the expense of operating reputations systems could be offset by lower costs elsewhere. If bad doctors (and incompetent technicians as well) were dealt with by reputation systems, malpractice lawsuits would be needed much less, if at all.

If we took away the regulatory swamp, the changes would be dramatic. You could have your gall bladder surgery done by a dental assistant. That would not be a good idea, but it would be your responsibility as a consumer to make that decision. Your protection against making bad decisions would be common sense, information, and effective reputation systems. My guess is that a lot of business process re-engineering would take place spontaneously if the regulatory swamp were replaced by consumer choice and reputation systems. I think that this is the best hope for allowing medical care to become as efficient as possible by taking advantage of the best technologies and practices our economy has to offer".

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Sunday, October 17, 2004

In an excellent new piece for HealthLeaders, E. Preston Gee asks an fascinating question with wide ranging implications for health care: "What if the mass merchandising giants like Wal-Mart or Target got into the healthcare delivery business in a big way?"

Highly efficient, consumer friendly, and tech-savvy companies like Wal-Mart and Target stand in sharp contrast to health care delivery. Many health strategists, including myself, have noodled on what it would take for hospitals and clinics to adopt consumer-focused, competitor-savvy practices of high performing industries like these "big box" retailers.

As Mr. Gee notes, the big retailers may never enter health care but that is beside the point. Health care providers must adapt to the new market realities. Employers and other demand-side players expect an end to the inefficiency, poor quality, and high error rates that plague much of health care delivery. After providing thoughtful advice on how they can adapt, Mr. Gee calls on health care executives to "lead their organizations into and through this new era of heightened expectations and emerging market-driven dynamics."

HIGHER STANDARDS ACHIEVED THROUGH LESS BUREAUCRACY

Specialty surgical hospitals in the United States trace their roots to ambulatory surgical centers (ASCs), which started to appear approximately 30 years ago. An ASC is a facility whose patients are admitted, treated, and discharged within a single day. No overnight hospitalization is included. Typically they are free-standing facilities not attached to or affiliated with a traditional general hospital. According to the American Surgical Hospital Association (ASHA), ASCs developed for several reasons, including:

** physician dissatisfaction with the work environment, efficiency, and quality of care provided in traditional general hospitals;
** advances in medicine that allow many procedures that once required an overnight stay in the hospital for recovery to be done on an out-patient basis;
** patient dissatisfaction with the hospital environment and lack of customer service; and
** increasing costs of medical care at traditional general hospitals.

A February 2002 report by the U.S. Department of Health and Human Services Office of Inspector General attributes the growth of ASCs to "advances in medical technology, increased focus on patient convenience, and economic incentives created by changes in reimbursement systems." According to ASHA, the ASCs developed slowly until 1982, when Medicare first approved them for reimbursement. From that point, growth has been rapid. There are currently more than 3,500 ASCs in the U.S.

The results of this industry growth have been impressive. By freeing themselves of the bureaucracy of a traditional general hospital, ASCs have been able to provide high-quality care at a lower cost. The key is specialization: A surgeon or facility devotes all of its energies to a few specific areas of care, resulting in increased efficiency and effectiveness.

From the ASCs developed modern specialty surgical hospitals. By focusing on a few surgical specialties, additional gains in efficiency and quality can be realized, this time in procedures that require an overnight stay or longer while the patient recovers.

Approximately 100 specialty surgical hospitals exist in the U.S. today. Some, such as Stanislaus Surgical Hospital in Modesto, California, offer a broad range of surgical procedures, including knee and hip replacement, hysterectomy, corneal transplant, and kidney surgery. By contrast, MedCath, a chain of 13 hospitals in nine states, focuses on cardiovascular surgery.

Specialty surgical hospitals are much smaller than traditional general hospitals. Medcath's 13 hospitals have between 32 and 112 inpatient beds each, and Stanislaus Surgical Hospital has 23 inpatient beds, while the average hospital in the U.S. has more than 160 beds. Hospitals in large urban area typically have several hundred beds, and some have more than one thousand beds.

Nurse-to-patient ratios are typically lower at specialty surgical hospitals. In a recent interview with Surgicenter Online, Stanislaus Surgical Hospital CEO Michael Lipomi said, "The nurses who prepare patients for surgery also recover patients, so patients see the same reassuring faces." At larger traditional general hospitals, a patient may see many different nurses during the course of his or her treatment, which can interfere with the continuity of care.

Many specialty surgical hospitals appear to provide better care than their traditional counterparts, as measured by patient outcomes......

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Saturday, October 16, 2004

SOME PROGRESS ON EXCESSIVE MALPRACTICE LITIGATION

Reforms to Oklahoma's civil justice system passed last year have contributed to a drop in medical malpractice cases, officials say. "Our claims have gone down as dramatically, if not more dramatically, than Texas' have,'' said State Finance Director Scott Meacham.

Tony Laizure, president of the Oklahoma Trial Lawyers Association, said that from July 2003 to this July, medical negligence cases dropped more than 60 percent in the eight counties whose cases are reported on the Oklahoma Supreme Court Network. Laizure credits tort reform improvements passed by the Legislature in 2003. The new law requires that each case be reviewed by an expert who determines if there was medical negligence.

While the number of cases has dropped, malpractice insurance rates have not and may not for awhile. The Dallas Morning News reported recently that the Texas reform law has not pushed physicians' premiums down, although malpractice cases have declined at least 80 percent in most major Texas counties.

Laizure said the state needs time to see whether two years of reform will produce positive changes. "These rates don't go up overnight and they don't go down overnight,'' he said. "You have to give these things some time to take effect.''

WA health authorities said today an outbreak of highly contagious Noro virus at Royal Perth Hospital (RPH) was under control, but they were continuing efforts to contain another potentially fatal superbug.

Dr Shirley Bowen, the WA Health Department's director of communicable diseases, today said four patients at RPH had contracted the Noro virus, with three fully recovered and one person still in isolation.

But an RPH spokeswoman said 16 other patients were in isolation after being identified as carriers of the potentially fatal "superbug" vancomycin-resistant enterococci (VRE). RPH has been battling to contain an outbreak of the antibiotic-resistant VRE for the past two weeks. A total of 27 RPH patients have been identified as carriers of VRE, with six people testing positive in the last 24 hours, according to the spokeswoman.

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Friday, October 15, 2004

GOVERNMENT CAN'T FIX IT

USA Today can see the problems but has no solution other than a huge raid on the taxpayer -- which has already been rejected in the Clinton years. Complete privatization is the only real solution. Medicine is too important an industry to be a government puppet

Bush and Kerry fail to grasp health crisis' magnitude. As every voter knows, health care in the U.S. is in crisis. The average monthly premium for a family is up 64% just since 2000. Annual medical spending now consumes 15 cents of every dollar spent. One in six Americans lack insurance, and their ranks continue to climb.

But neither President Bush nor Sen. John Kerry has a plan to match the scale of the problem. They've shown little passion about reforming a system that appears out of control. Instead, they seem most animated when arguing over secondary health issues: Bush rails against trial lawyers who drive up malpractice insurance rates, and Kerry assails drug companies that block the reimportation of cheaper drugs from Canada. Yes, both candidates have health care proposals they are sure to tout in tonight's debate. But viewers looking for a comprehensive plan that extends coverage to the 45 million uninsured and tackles the underlying causes of skyrocketing costs will be disappointed.

The sad truth is that neither candidate has a bold vision that can spark an overdue debate on how to overhaul a system that no longer works for most Americans. By failing to think big now, the next president will only have a worse problem to face later in his term. Bush and Kerry each offer help for some people, but they don't go nearly far enough:

Bush: He would let small businesses band together to buy cheaper insurance coverage, provide $89 billion in tax credits over 10 years to help low-income families buy private insurance, and expand tax breaks for others to pay out-of-pocket medical expenses. Independent groups say his proposals would extend coverage to less than 20% of the uninsured and would not do anything to control costs.

Kerry: He has a more ambitious plan to extend coverage to 27 million people - more than half of the uninsured - by letting them buy coverage similar to what federal employees get. He would also have the government pay for most medical bills over $50,000 and greatly expand existing programs for children and the poor. But he provides few cost controls for a plan estimated to cost $653 billion to $1.5 trillion over 10 years.

Costs are going up for many reasons. One is that expensive new drugs, procedures and tests are coming onto the market. Yet consumers have little incentive to shop for bargains as long as their insurance covers the expense. And many doctors feel compelled to order unnecessary tests to protect themselves from potential malpractice suits. Another factor is that people with insurance pay ever-larger costs to subsidize those without coverage. Many providers offer discounts to the uninsured, and make up the difference from those with health plans. Meanwhile, Medicare costs keep soaring as Washington adds new benefits for seniors, the latest being prescription drug coverage.

More efficient use of medical services and more competition can help slow costs. Extending coverage to all benefits the insured as well as the uninsured. And restraining Medicare costs is essential as baby boomers begin retiring before the end of the decade.

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For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation.

Comments? Email me here. If there are no recent posts here, the mirror site may be more up to date. My Home Page is here or here.

Background

Postings from Brisbane, Australia by John Ray (M.A.; Ph.D.) -- former member of the Australia-Soviet Friendship Society, former anarcho-capitalist and former member of the British Conservative party.

This blog gives a lot of attention to events in Australia and Britain -- places where there already exist systems similar to the one most likely to befall the USA if the Democrats get their way -- "Free" medical care supposedly available to all through government hospitals but with a competing private sector as well. The Canadian system is considered too Soviet to provide a likely model for the USA

TERMINOLOGY: Many of my posts concern the very instructive state of socialized medicine in Australia. Like the USA, Germany and India, Australia has a system of State governments which have substantial independence from the central (Federal) government and it is they who are mainly responsible for "free" health services. It may therefore be useful to some for me to note the standard abbreviations for the States concerned: QLD (Queensland), NSW (New South Wales), WA (Western Australia), VIC (Victoria), TAS (Tasmania), SA (South Australia).

For greatest efficiency, lowest cost and maximum choice, ALL hospitals and health insurance schemes should be privately owned and run -- with government-paid vouchers for the very poor and minimal regulation. Both Australia and Sweden have large private sector health systems with government reimbursement for privately-provided services so can a purely private system with some level of government reimbursement or insurance for the poor be so hard to do?

Conservatives do NOT object to helping the poor. Government welfare legislation in aid of the poor was in fact first introduced by conservatives -- Bismarck and Disraeli in the 19th century. What conservatives want is for the help to be delivered in a sane manner. And anyone who thinks that government bureaucracies can run hospitals well is completely out of touch with reality.

One of the oldest "free" public hospital systems in the world is that in the Australian State where I live: Queensland. It dates from 1944 (Britain's NHS began in 1948). So its advanced state of decay reveals well where the slow cancer of bureaucracy ends up. It now has three "administrative" employees for every medical employee. All those clerks are really good at curing people, I guess! Frequent bulletins on the flailing but ineffectual attempts to "fix" the system will appear here -- as well as bulletins on the dreadful things it does to patients and the long waits they endure.

On all my blogs, I express my view of what is important primarily by the readings that I select for posting. I do however on occasions add personal comments in italicized form at the beginning of an article.

I am rather pleased to report that I am a lifelong conservative. Out of intellectual curiosity, I did in my youth join organizations from right across the political spectrum so I am certainly not closed-minded and am very familiar with the full spectrum of political thinking. Nonetheless, I did not have to undergo the lurch from Left to Right that so many people undergo. At age 13 I used my pocket-money to subscribe to the "Reader's Digest" -- the main conservative organ available in small town Australia of the 1950s. I have learnt much since but am pleased and amused to note that history has since confirmed most of what I thought at that early age.

I imagine that the the RD is still sending mailouts to my 1950s address!

NOTE: The archives provided by blogspot below are rather inconvenient. They break each month up into small bits. If you want to scan whole months at a time, the backup archives will suit better. See here or here